Yen Crosses: Opportunities to Buy on Dips

Euro / Japanese Yen

Last update, I wrote that “for the first time since late summer 2008, the slope of the 55 day moving average on the EURJPY is positive.  There are a number of wave counts at the current juncture, so confidence in the pattern is low right now.  The EURJPY is in the center of a range, which makes controlling risk difficult.  One possibility though is that the pair completing a C wave of a flat that will end above 130.”  I favor this count, although controlling risk is difficult at the current juncture.  Look to buy dips near the 55 day SMA (121).

British Pound / Japanese Yen

The GBPJPY advance from 118.79 is viewed as corrective but additional strength is expected.  Corrections can take many different forms so there is little confidence in directionality at the current juncture.  In this case, the advance from 118.79 could become a triangle or flat.  Both patterns would result in a short term top relatively soon.

Swiss Franc / Japanese Yen

The CHFJPY pattern is the exact same as the EURJPY.  Expectations are for a push through 87.09 in order to complete a flat.  Near term weakness below 82.36 would present a buying opportunity.  The 55 day SMA near 81 is potential support.

Canadian Dollar / Japanese Yen

A base seems to be forming from multi-year lows and important moving averages are turning up in the CADJPY.  Price has broken above a resistance line connected off of the November and January highs.  A retest of this line as support (below 75) would present a buying opportunity.

Australian Dollar / Japanese Yen

After 5 clean waves down from the July 2008 high, the AUDJPY has traded in a choppy range between 55 and 70.  The slow decline from 70.58 has the personality of a B wave in what is probably a flat.  A push above 70.58 would complete the pattern.  Support is at 61.

New Zealand Dollar / Japanese Yen

The NZDJPY is just now crossing the 55 day SMA but price remains below the top of a choppy downward sloping channel.  Until a break above that channel line, the NZDJPY remains vulnerable to a new low in order to complete an ending diagonal from .6161. 



Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close.  He is also the author of Sentiment in the Forex Market.

Please send comments about this report to jsaettele@dailyfx.com.